I am using the Wire library to get input from a capacitive sensor. I also have a 5x7 matrix (LiteOn LTP 747R) using only 12 pins and no chip controller (pins directly to the Wiring board). The sensor is powered via a 3.3V transistor. The power source is set up to come from the USB connection. I have this function

I did the poor man's debugging commenting line by line starting with all commented (leaving the variable and the return statement uncommented) and then un-commenting one by one from top to bottom (I gave

v

a default value so it wouldn't "break").

Right now the display matrix is just showing some "hello world" text. It all works well while I uncomment line by line until I reach

v = Wire.receive();

when the display starts behaving erratically (e.g. "h llo wor d" with flickering). It is as if the receiving function introduces some sort of noise to the rest of the circuit.

Assuming it is not a software issue, how would a recommended wiring go? I tried adding a large capacitor (1000 microF 10V) thinking it may be loss of current by the mtrix due to the capacitive sensor but that did not work (the matrix still lights up very, very dimly almost not at all).

I had a similar issue with the matrix and motors, and adding a 47 microF capacitor worked fine so that's why I tried this.

You might consider to get extra power. The USB power is ok for small experiments, but working with LED matrix and Motors require higher current drive. Perhaps using an external power supply for those devices or for the Wiring board will help.